Strategies To Optimize a Lazada Shop-in-Shop for Maximum Retail Performance

With Alibaba’s acquisition of Lazada and Southeast Asia’s mirror-like ecosystem to that of China, it’s no surprise that the region’s more popular marketplace is moving towards a more Tmall-like model.

The largest sign being the opportunity for brands to design their own shop-in-shop – called Tmall flagship stores in China. They drive on-site traffic and simply optimizing shop-in-shop text and images can lead to maximum conversions.

In this article, we look at some best practices from popular Tmall flagship stores in China and explore opportunities for brands to improve their shop-in-shop performance on marketplaces in Southeast Asia, specifically Lazada.

Best Practices for Shop-in-Shops: Learnings from China

Tmall’s shop-in-shop concept called flagship stores – 天猫旗舰店 in Chinese – became officially available to brands in 2010. Ever since then, global and local brands and retailers have opened their own branded stores on China’s biggest ecommerce platform.

With the help of official TPs (Taobao Partners), agencies who help brands design and operate flagship stores, Tmall stores in China have undergone a massive transformation.

Although every brand has a unique Tmall flagship store identity, there are several patterns that successful brands employ that could be applied to marketplace presence in Southeast Asia, whether today or in the near future. They include:

Bundling

Bundling is a very common concept on Tmall brand stores because it helps brands achieve three things:

Address channel-conflict, usually online, by creating ‘new’ products by combining them together into a single SKU.

Increases average order values (AOVs) to offset delivery costs. This is frequently applied by CPGs such as Unilever, P&G and Coca-Cola whose products, if sold in single units, wouldn’t make sense for ecommerce.

Quickly testing new product combinations and their traction. For offline retail, it often takes months to get new SKUs into the distribution chain and then another few months to get feedback from customers.

Tmall flagship stores have evolved over the last decade to become a viable alternative to brands’ creating their own ecommerce sites. Nowadays, Tmall allows brands to soup up their stores with not only banners and graphics but also more engaging videos.

Why is this important? Because viewers can be 64-85% more likely to purchase after watching a product video.

Estée Lauder home page on Tmall rich in contentJohnson & Johnson informative home page on Tmall

Coupons and Promotions

What is Tmall without promotions? Neutrogena’s flagship store has a dedicated section for coupons that can be redeemed and applied right away to increase chances of a browser converting.

Neutrogena coupons on Tmall flagship store

Johnson & Johnson’s Aveeno brand offers customers a chance to enter a lucky draw for each purchase.P&G offers customers a gift set if they spend over 159 RMB, approximately $23.

Flash sales and time-based offers

Aveeno offers 50% off for buyers in the first 5 minute of its flash sale, limited to 1,000 units.

Live chat (often split between pre-sales and post-sales live chat)

Often credited as one of the reasons why Alibaba/Taobao was able to defeat eBay in China is live chat. Since the early days, Taobao offered a way for customers to talk directly to merchants through it’s WangWang chat platform.

When Tmall spun off from Taobao, WangWang was also applied to the B2B2C Tmall model. Nowadays, customers can login and chat directly with the customer service reps of a brand’s Tmall flagship store.

Review management

Tmall allows customers to leave reviews after their purchase and also for merchants to reply to their customers. This offers brands a way to manage their online reputation – something most brands have engaged TPs to help manage due to high volumes.

Below is an example of Neutrogena’s TP helping address a customer’s negative review.

Store design

Having a great-looking and brand-aligned store design can mean the difference between a high and low conversion rate. In China, brands often engage TPs to help them not only manage but also design and decorate their stores.

Adidas’ Tmall flagship store design follows its brand guidelines so customers browsing the store will feel like they’re on the Adidas.com official brand site.

Product detail page optimization (text, graphics)

Product detail pages (PDP) don’t have to be bland and boring. Tmall’s official stores have taken PDP design to the next level by including high-res images, videos, customer reviews, company details/history, and much more. All this is to help increasing conversion rates by providing customers with as many relevant details as possible as well as establishing trust through brand consistency and social proof.

Best Practices for Shop-in-Shops in Southeast Asia

Obviously, Chinese ecommerce and Tmall are several years ahead of Southeast Asia. However, as Lazada is already moving towards a Tmall model and offering more and more features to brands operating shop-in-shops, there are several best practices that can already be implemented for brands to benefit from:

Brand-centric store design

Rich (video) content

Product detail page optimization (text, graphics)

Onsite SEO

Live chat

Product sampling

Brand-centric store design

Launched as early as 2013, Maybelline was one of the first shop-in-shops on Lazada. As one of the pioneering brands in Thailand ecommerce, Maybelline’s Lazada shop-in-shop store design arguably is the most sophisticated, offering high-res, brand-aligned banners and creatives as well as video content.

Rich (video) content

Lazada offers YouTube video embeds that Maybelline has used to feature campaign and branding videos. Others like La Roche Posay are leveraging videos to explain how to use their products via walkthroughs.

Product detail page optimization (text, graphics)

Brands on Lazada still under perform in terms of PDP optimization. Most SKUs use only a few lines to describe the product and only a few brands have utilized images or videos to spruce up content.

Onsite SEO

To gain organic traffic coming from Google and also from Lazada, brands should increase the amount of text on their homepage, category and product detail pages. Some of this is done by Lazada but brands should be actively driving this process, either directly or via partners.

Live chat

Live chat is pretty much the default standard on Tmall flagship stores but only a few brands are offering it on their Lazada shop-in-shops. One example is La Roche Posay who recently piloted a live chat feature on its Thailand Lazada shop-in-shop for a short trial period that has since ended.

Product sampling

Another unique feature that’s currently being piloted on some Lazada shop-in-shops is product sampling. Purina One’s shop on Lazada has a link out to a form where users can sign up to receive free samples. This is a great way for brands to not only acquire new users for their CRM database but also increase the exposure of new products.

As ecommerce continues to develop in our region, more brands are faced with the choice to set up on popular marketplaces or build their own brand.com website.

Setting up shop on marketplaces is more than simply uploading product pictures and hoping for a sale – it requires a similar strategy to setting up a brand.com. Businesses on marketplaces shouldn’t forget about the variety of tools available to them to influence sales and conversion rates and can either choose to do this themselves or partner with a specialist, “TP” in Southeast Asia.